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2012 IRS Tax Deductible Standard Mileage Rates

The Internal Revenue Service (IRS) released the 2012 optional standard mileage rates that employees, self-employed individuals and other taxpayers use to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. For the most part, they have not changed much since the 2011 mid-year adjustment.

2012 Standard Mileage Deduction RatesBeginning on January 1, 2012, the standard mileage rates for the use of a car, van, pickup truck or panel truck will be:

How are the Standard Mileage Rates Calculated?The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study.

“The detailed information we collect regularly reflects market conditions nationwide and enables the IRS along with many other organizations to make more informed business decisions related to vehicle costs”. "Costs have remained relatively stable since the mid-year adjustment in July 2011,” said Ted Schuerman, senior project leader, Runzheimer International.

Notice 2012-01 contains the standard mileage rates, the amount a taxpayer must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that a taxpayer may use in computing the allowance under a fixed and variable rate plan.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Limitations on the Use of the Business Standard Mileage RateU.S. taxpayers cannot use the business standard mileage rate for:

Vehicles that use any depreciation method under the Modified Accelerated Cost Recovery System (MACRS)

Vehicles that claim a Section 179 deduction

Vehicles used for hire

More than four vehicles used simultaneously

These and other requirements for a taxpayer to use a standard mileage rate to calculate the amount of a deductible business, moving, medical or charitable expense are outlined in Revenue Procedure 2010-51.